The use of payments data to improve monetary and financial analysis
Filipa Lima
Porto, 20|22 June 2013 Agenda
 Introduction
 Characteristics of payments data
 Uses of payments data
 Balance of payments
 Financial integration
 Short‐term forecastingg
 Final remarks
The use of payments data to improve monetary and financial analysis
Porto, 20|22 June 2013 2
1
Introduction
Number of transactions with cashless payment instruments within the Euro Area countries (cumulative growth rates)
140%
120%
100%
80%
60%
40%
20%
0%
‐20%
‐40%
‐60%
2000
2001
2002
2003
Card payments
2004
2005
Credit transfers
2006
2007
2008
Direct debits
2009
2010
Cheques
2011
GDP
Source: Blue Book (ECB, Statistical Data Warehouse).
The use of payments data to improve monetary and financial analysis
Porto, 20|22 June 2013 3
Cashless payments situation in Europe
Cash withdrawals and card payments per capita 2002‐2011 50
UK
45
40
IE
BE
SI
35
30
PT
Number of ATM 25
cash withdrawals
20
per capita
LT
DE
GR
HU
FR
NL
SE
LV
PL
15
FI
EE
MT
ES
CY
LU
10
5
0
0
50
Source: Blue Book (ECB, Statistical Data Warehouse).
The use of payments data to improve monetary and financial analysis
100
150
200
250
Number of card payments per capita
Porto, 20|22 June 2013 4
2
Characteristics of payments data
 The Blue Book, a publication issued by the European Central Bank/Eurosystem contains the description of the payment systems and
Bank/Eurosystem, contains the description of the payment systems and instruments/ means of payment in every EU country.  The Bank for International Settlements publishes the Red Book, which is an annual publication that provides data on payments and payment, clearing and settlement systems in the CPSS (Committee on Payment and Settlement Systems) countries.
 Banco de Portugal publishes payment systems statistics:


Interbank operations
Use of cheques, credit transfers, direct debits, bills of exchange and Multibanco (Portuguese ATM and POS network)
 In general these data have the advantage of being very timely and cost‐
effective
The use of payments data to improve monetary and financial analysis
Porto, 20|22 June 2013 5
Uses of payments data – balance of payments
 In Portugal, card payments have been used for the estimation of the travel item in the Balance of Payments (BoP)
 Data include the number and value of operations, as well as the characteristics associated with the cards and the type of channel used:
 performed in Portuguese ATMs and POS with cards issued abroad  credits 

 performed abroad with cards issued by Portuguese entities  debits The use of payments data to improve monetary and financial analysis
Porto, 20|22 June 2013 6
3
Portugal has a favourable institutional environment in what concerns to payment cards...
Variable
Articulation between Payments Systems and Statistics Dept.
Widespread use of payment cards
One large company involved in processing payment card data
...that allows us to have a comprehensive database
Present
Future
Type of Terminal
yp
((ATM or POS))


Type of Operation


Country


Mode of Transaction (via internet or face‐to‐face)

(annual)

(monthly) Number of Operations


Amount of the Transaction


POS NACE / POS merchant code

Location

Bin Code

Terminal ID

Source: Gonçalves, P. and Matos, B, (2012). Integrating data sources and frameworks for compiling travel”, Working Party on International Trade in Goods and Trade in
Services Statistics, Organisation for Economic Co‐operation and Development, October 2012.
The use of payments data to improve monetary and financial analysis
Porto, 20|22 June 2013 7
Travel (BoP) and the use of cards issued abroad (in Portugal) Value (millions of Euro)
MA(12)
50%
1400
1200
40%
1000
30%
800
600
20%
400
10%
200
Withdrawals and purchases with cards issued abroad (A)
2012 Jul
2011 Jul
2012 Jan
2010 Jul
"Travel" BoP (B)
2011 Jan
2009 Jul
2010 Jan
2008 Jul
2009 Jan
2007 Jul
2008 Jan
2006 Jul
2007 Jan
2005 Jul
2006 Jan
2004 Jul
2005 Jan
2003 Jul
2004 Jan
2002 Jul
2003 Jan
2001 Jul
2002 Jan
0%
2001 Jan
0
MA(12) of (A)/(B)
Source: Banco de Portugal (Statistical Bulletin).
The use of payments data to improve monetary and financial analysis
Porto, 20|22 June 2013 8
4
Uses of payments data – financial integration
 Payments data can also be used to measure the evolution of monetary and financial services as illustrated by Cadete de Matos and D’Aguiar (2009) 
“boom in retail financial services”
 Multibanco:
 more than 60 different services
 of which 30 also available at POS terminals
 money transfers (both to other customers in the same bank and to other banks)
 payments for utilities bills
 payments to the State and the Social Security
 mobile phone top‐ups
 transport ticketing
 event booking and ticketing
The use of payments data to improve monetary and financial analysis
Porto, 20|22 June 2013 Number of ATMs per million inhabitants
Number of POS per million inhabitants
30000
25000
20000
15000
10000
5000
0
2004 2005 2006 2007 2008 2009 2010 2011
Euro area
1800
1600
1400
1200
1000
800
600
400
200
0
2004 2005 2006 2007 2008 2009 2010 2011
Portugal
Euro area
Inhabitants per institution
80000
9
Portugal
Inhabitants per branch
2000
60000
1500
40000
1000
20000
500
0
0
2004 2005 2006 2007 2008 2009 2010 2011
Euro area
Portugal
2004 2005 2006 2007 2008 2009 2010 2011
Euro area
Portugal
Source: Cadete de Matos, J., 2012, Measuring the Evolution of Monetary and Financial Services in Portugal, Irving Fisher Committee on Central Bank Statistics / Bank Negara Malaysia,
Workshop on Financial Inclusion Indicators, Sasana Kijang, Kuala Lumpur, 5‐6 November 2012
The use of payments data to improve monetary and financial analysis
Porto, 20|22 June 2013 10
10
5
Uses of payments data – Short‐term forecasting
ATM/POS data weight on nondurables consumption (annual figures %)
Nondurable private consumption vs. ATM/POS data : 0.83 Source: Esteves, P. S. (2009). “Are ATM/POS data relevant when nowcasting private consumption?”, Banco de Portugal, Working Papers 25 | 2009.
The use of payments data to improve monetary and financial analysis
Porto, 20|22 June 2013 11
Cheques returned for insufficient funds in the account (as a % of presented cheques) and GDP growth ‐ Portugal
70%
10%
60%
8%
6%
50%
4%
40%
2%
30%
20%
10%
0%
‐2%
: – 0.78 ‐4%
‐6%
Mar‐00
Jul‐00
Nov‐00
Mar‐01
Jul‐01
Nov‐01
Mar‐02
Jul‐02
Nov‐02
Mar‐03
Jul‐03
Nov‐03
Mar‐04
Jul‐04
Nov‐04
Mar‐05
Jul‐05
Nov‐05
Mar‐06
Jul‐06
Nov‐06
Mar‐07
Jul‐07
Nov‐07
Mar‐08
Jul‐08
Nov‐08
Mar‐09
Jul‐09
Nov‐09
Mar‐10
Jul‐10
Nov‐10
Mar‐11
Jul‐11
Nov‐11
Mar‐12
Jul‐12
Nov‐12
0%
% insufficient funds in the account
1 year mov. avg (% insufficient funds in the account)
Quarterly GDP (year‐on‐year growth rate)
1 year mov. avg (Quarterly GDP growth rate)
Source: Banco de Portugal (Statistical Bulletin) and INE.
The use of payments data to improve monetary and financial analysis
Porto, 20|22 June 2013 12
6
Uses of payments data – Other
 Attanasio and Japelli (2002): estimate the demand for currency
 substantial differences in the equations for ATM cardholders and nonholders
 demand for currency of those who choose to have an ATM card is considerably more elastic to the interest rate than that of the households that do not hold such a card
 Occasional surveys: additional information on payment behaviour
 Jonker (2005), use of electronic payment cards (debit and e‐purse):
– Age (negative)
– Educational level of consumers (positive)
(p
)
–
≠
 Banco de Portugal (2007): “The survey focusing on consumers produces findings in line with studies in other countries (the U.S., Belgium and the Netherlands) to the effect that the use of electronic payment instruments (payment cards) is directly related to income and education and inversely to age”.
The use of payments data to improve monetary and financial analysis
Porto, 20|22 June 2013 13
Consumers – payment cards in wallet or purse by gender and age bracket (as a percentage)
60%
50%
40%
30%
male
20%
female
10%
0%
Only have Have debit Only have debit card card and credit card
credit card
Have no card
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
18‐24 years
25‐34 years
35 44
35‐44 years
45‐54 years
54‐65 years
Over 65 years
Only have Have debit Only have Have no debit card card and credit card card
credit card
Source: SIBS and Unicre in Banco de Portugal (2007). “Retail Payment Instruments in Portugal: Costs and Benefits”, July 2007.
The use of payments data to improve monetary and financial analysis
Porto, 20|22 June 2013 14
7
Final remarks
• Use of payments data: the typical advantages of using administrative data
 very timely
 reduced burden on respondents
 more cost‐effective compilation of statistics
• SEPA: major window opportunity for NCBs to benefit from harmonised
payments’ data across Europe
• NCBs (and NSIs) should be aware of the potential usage of these data: it is an excellent example of how response burden and costs can be reduced while, at the same time, timeliness and quality of statistics can be improved
The use of payments data to improve monetary and financial analysis
Porto, 20|22 June 2013 15
Thank you for your attention!
Filipa Lima
Deputy‐Director
slima@bportugal.pt
8